Beware of adverse effects of common currency, Emefiele warns

Countries of the West Africa Sub-region have failed to meet all the convergence criteria for a common currency and unified monetary zone.

Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele has cautioned member countries of the sub-region not to let the desire for a common currency and economic prosperity for their people blind them to the adverse and contagion factors associated with a unified monetary area and common currency.

Speaking at the 37th Meeting of the Committee of Governors of Central Banks of the West African Monetary Zone in Abuja yesterday, Emefiele cautioned that “our desire for greater economic prosperity for our people through a common monetary union must not vitiate our awareness of the potential adverse and contagion factors associated with unified monetary area and common currency.”

Specifically, Emefiele noted that “the unfolding trade war between the United States, China and the West portends both opportunities and challenges for our region’s economy, depending on how we approach it individually as nations. Nonetheless, while the shocks to individual economies might vary in magnitude and intensity, it might yet be an opportunity for us to look inward and strategize on how best to fill the trade gap that would ensue.”

Going forward, Nigeria’s Central Bank Governor advocated that “now is the time to create the West African Monetary Zone (WAMZ) Commission to drive our common interests and aspirations. We must intensify our level of cooperation and collaboration through strong bonds to work as a unit within the ECOWAS monetary union programme to achieve our shared objective.”

Emefiele stated that “it has become imperative for us to bring this collective resolve to bear as we embark on a thorough review of the economic conditions of member countries vis-a-vis their levels of preparedness for the monetary union and economic integration of the sub-region.”

For this reason, the report of the 33rd Meeting of Joint Technical Committee that is scheduled to be submitted in course of the WAMZ meetings he said “should be meticulously and objectively studied for the purpose of gaining more clarity on the level of preparedness of member countries  for regional integration.”

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